The Difference between Fixed-Rate Mortgages and Adjustable Rate Mortgages

Homeownership is a goal that many people share but not everyone's financial situation is the same. There are different mortgage financing options depending on the individuals overall financial situation. Fixed-rate mortgages and adjustable rate mortgages are some of the most common type of loans people obtain to their new dream home.

Fixed-Rate Mortgage Loans

Fixed-rate mortgages are a popular financing option for those who want to know how much they will be paying in monthly mortgage payments over the next 30 years. With this option, you pay the same amount each month and your interest rate is fixed, hence the name. Meaning, your interest rate and monthly mortgage rate will never fluctuate and will always stay the same. The only way to obtain a new rate is to refinance the loan; this is often done when interest rates are low, such as they are now in 2021. The advantage to this form of financing is that it provides stability and you can budget without worrying about fluctuation in rates because your monthly payment is never going to change.

Adjustable Rate Mortgage Loans

For an adjustable rate mortgage loan, the borrower can choose a monthly payment that changes based on the current interest rate. The popularity of the adjustable comes for being able to have some flexibility in the interest rate they pay overtime. This is to give borrowers the option to adjust their payments according to their current financial status and needs over the course of the loan. An adjustable rate mortgage loan is an interest-only loan that does not have any preset fixed payment amount and can change over time according to market fluctuations.

Contact Amerifund Corporation

While fixed rate mortgage loans and adjustable rate mortgage loans can benefit a mass amount of individuals they are not always the best option for anyone. It is important to consult with our seasoned and knowledgeable mortgage lenders at Amerifund Corporation to see which home loan is right for you and your family. Not every loan is beneficial to every individual, which is why our mortgage lenders can go over any questions or concerns that you may have to find the right loan for your financial status.

If you have any other questions about home loan mortgages and financing, and how to finance a home please contact us at Amerifund & Realty Corporation by visiting our website or giving our office a call at (714) 500-5001. We are happy to go over additional information with you regarding mortgages and finances and answer any questions or concerns that you may have with our experienced and knowledgeable lenders at our office.